Appendix J - LA City Planning3) Profiling the competitive alignment the retail element of the development will face; 4) Estimation of current and future expenditure potentials for

Appendix JBaldwin Hills Crenshaw Plaza

Economic Impact Analysis

600 Glorietta Blvd. 619.417.3685 office Coronado, CA 92118 619.435.6414 fax

MARKET RESEARCH, FINANCIAL ANALYSIS & NEW BUSINESS DEVELOPMENT

TO: Bryce Ross – The Festival Companies Linda Bozung – DLA Piper FROM: Bill Speer – Speer Consulting LLC DATE: March 12, 2010 RE: Baldwin Hills Crenshaw Plaza Economic Impact Analysis

BACKGROUND

Speer Consulting, LLC has been engaged by The Festival Companies (“Festival”) to prepare an economic impact/urban decay analysis for the redevelopment of the one million square foot Baldwin Hills Crenshaw Plaza (“BHCP” or the “Project”) located in southwest Los Angeles, California. This memorandum summarizes results of this analysis. Festival manages BHCP on behalf of Capri Urban Baldwin, LLC and Capri Urban Crenshaw, LLC (“Capri”), owners of BHCP. A proposed expansion/redevelopment of BHCP will encompass up to 3.5 million square feet of developed building area and is expected to be completed in 2015. The Project is planned to contain 1.5 million gross leasable square feet of retail, restaurant and entertainment space, about 150,000 square feet of office space, a 400-room hotel and approximately 960 residential units. This study was prepared to determine potential economic impacts on existing retailers operating within the primary trade area defined for the development. The scope for this assignment entailed:

1) A field visit to the property and its environs; 2) Definition and evaluation of the primary trade area for proposed retail uses at the

Project; 3) Profiling the competitive alignment the retail element of the development will

face; 4) Estimation of current and future expenditure potentials for the development; 5) Quantification of new retail space supportable within the primary trade area by

the time the Project is completed in 2015; and

BHCP Economic Impact Memo 3/12/2009 Page 2 of 22

6) Assessment of whether the introduction of the Project into the defined primary trade area would result in adverse economic impacts on local retailers leading to urban blight.


EXECUTIVE SUMMARY Development Program Current plans for the Project contemplate a mix of retail, office, hotel and residential uses in a combination of open-air and enclosed environments. Retail offerings within the Project are expected to complement, rather than directly compete with, surrounding existing retail establishments. The table below presents a summary of the elements of the Project, and the site plan following presents a graphic distribution of uses for the redeveloped Baldwin Hills Crenshaw Plaza.

Use Current S.F. Proposed S.F.

Anchors (>25,000 S.F.):Macy's 158,306 158,306Sears 150,920 150,920

WalMart 153,425 90,000South Anchor 0 135,000

T.J. Maxx 30,572 30,572Magic Johnson Cinema 75,000 0

New Cinema 0 90,000Albertson's Supermarket 44,052 55,000

New Grocery Store 0 30,000Bowling Alley 0 25,000

Fitness Center 0 50,000Subtotals, Anchors 612,275 814,798

In-Line Tenant Space:Comparison Goods Retail 138,153 469,428

Food & Beverage 22,642 158,500Personal Services/Dance Studio 7,544 20,000

Subtotals, In-Line Retail 168,339 647,928

Total Mall Space: 780,614 1,462,726

Peripheral Pads:Comparison Goods Retail 18,027 0

Food & Beverage 26,678 12,000Sevices/Other 11,962 0

Office 4,623 150,000Subtotals, Peripheral Pads 61,290 162,000

MALL & OUTBUILDINGS TOTAL 841,904 1,624,726

Hotel:Rooms (400) 0 315,000

Meeting Rooms 0 15,000Food & Beverage 0 16,500Subtotals, Hotel 0 346,500

Residential:Condominiums (551 Units) 0 742,500

Apartments (410 Units) 0 492,000Subtotals, Residential 0 1,234,500

Non-Leasable Area: 155,705 230,000

GRAND TOTAL, OVERALL PROJECT 997,609 3,435,726

Source: The Festival Companies

BALDWIN HILLS CRENSHAW PLAZADEVELOPMENT PROGRAM

Renovated Mall

Existing Retail

ExistingRetail

New Theater w/Retail Below

Renovated Existing

RetailNew MallEntrance

New Major Retail

NewParking Structure

NewParking Structure w/

Major Retail andMall Expansion

Below

New Hotelor Office

New Hotelor Office

New Commerical

Open AirEntertainment

District

Crenshaw Blvd.

Marlton Ave.

Sant

a Ros

alia D

r.

Marti

n Lu

ther

King

Jr.B

lvd.

Stocker St.

West 39th St.

Renovated 2ndLevel BridgeConnection

New Housing

New Retail

New Retail andRestaurants

New Retailand Restaurants

New Retail

New Retailand Restaurants

New Retail

New Residentialw/ Open Space(Parking and Retail Below)New Open Air

Retail PedestrianWalk

Parking Located Below

Figure 2Baldwin Hills Crenshaw Plaza

Proposed Site Plan

Source: Rios Clementi Hale Studios, September 2008.


Findings and Conclusions The redevelopment of Baldwin Hills Crenshaw Plaza will incorporate a dynamic

mix of retail, office, hotel and residential uses on a 43-acre site bounded by Santa Rosalia Drive, Marlton Avenue, West 39th Street, Stocker Street and Crenshaw Boulevard, in Los Angeles, California.

The primary trade area for the retail element of the development has been

defined based on the results of surveys conducted at BHCP, and includes 11 zipcodes in south and southwestern Los Angeles. Its average radius is approximately three miles.

This trade area is home to an estimated 440,800 residents; households number 143,600; average household income is estimated at $53,100; and aggregate household income is estimated at $7.6 billion. By 2015, trade area population is projected to approximate 464,000, while households are expected to number 150,000, average household incomes should approximate $61,600 annually, and total household income is projected at more than $9 billion. (2015 figures in current dollars.)

The Project will face an array of competitive retail facilities when it is completed.

Within the defined primary trade area, there are approximately 14 neighborhood and community centers, offering 1.4 million square feet of retail space, in operation. BHCP, however, is at present (and will continue to be) the only department store-anchored regional or super-regional mall serving the primary trade area. Other than the Project, +/-900,000 square feet of retail space is planned within the trade area and could be developed over the next five years.

Trade area residents now devote an estimated $2.0 billion to shopping center-

type retail expenditures. This total is expected to increase to $2.4 billion in 2015, creating more than $425 million in new demand (expenditure potential) for retailers within the defined primary trade area.

This incremental spending potential within the primary trade area should support

an estimated 1.4 million square feet of new shopping center space by 2015, exceeding the anticipated level of occupied new leasable area which are planned to be delivered during that time period.

Accordingly, it is not expected that development of the Project would result in disinvestment, store closures or physical blight which could be associated with urban decay.


CALIFORNIA ENVIRONMENTAL QUALITY ACT BACKGROUND

The California Environmental Quality Act (“CEQA”) requires state, local and other agencies to make informed decisions about the environmental implications associated with the approval of proposed projects. If a proposed development project is subject to CEQA, both direct and indirect impacts of the project on the physical environment must be analyzed. CEQA’s Section 15064(e) states that “[w]here a physical change is caused by economic or social effects of a project, the physical change may be regarded as a significant effect in the same manner as any other physical change resulting from the project. Alternatively, economic and social effects of a physical change may be used to determine that the physical change is a significant effect on the environment.” Proposed new retail/commercial developments can compete with existing retailers in the area surrounding a development project. In some cases, adverse economic impacts could result in disinvestment, business closures or other manifestations of physical deterioration which could result in urban decay. CEQA requires mitigation of such impacts if they are deemed to be significant. This study was prepared to determine if the BHCP Project would cause significant economic impacts on surrounding retailers. This analysis measures such impacts by identifying the anticipated growth in retail expenditures within the Project’s defined primary trade area and quantifying the amount of newly-developed retail space it would support. Estimated sales from any incremental new space proposed for the Project which exceeds that which would be supported by expected population and spending increases within the primary trade area must be allocated to subsectors of the primary trade area, and resulting economic impacts must be measured to determine if anticipated economic impacts would be significant.


SITE LOCATION & ACCESS Baldwin Hills Crenshaw Plaza sits on a site of approximately 43 acres, bounded to the south by Santa Rosalia Drive, to the west by Marlton Avenue, to the north by West 39th Street and to the east by Stocker Street and Crenshaw Boulevard, a major local thoroughfare. The site is bisected by Martin Luther King Jr. Boulevard. While the property does not enjoy immediate access to, or visibility from, any major area highways, it lies just two miles south of Interstate Highway 10, three miles west of Interstate Highway 110 and about four miles east of Interstate Highway 405. Existing neighboring land uses are commercial and residential, with a significant number of surrounding properties slated for future redevelopment. The property lies five miles southwest of Los Angeles’ central business district and five miles northeast of Los Angeles International Airport. The map and aerial photos following show Baldwin Hills Crenshaw Plaza in its locational context.


SITE AERIAL PHOTO – REGIONAL CONTEXT

BALDWIN HILLS CRENSHAW PLAZA SITE AERIAL PHOTO – CLOSE UPS

AV-1

A E R I A L V I E W2009© All ideas, arrangements, and plans indicated or represented by the above drawings are property of ka inc. and were created for the sole use in connection with the specified project. No part of the drawings, arrangements, or ideas therein shall be duplicated or used in whole or part for any other purpose whatsoever without the expressed written permission of ka inc.

B A L D W I N H I L L S C R E N S H AW P L A Z AL o s A n g e l e s , C a l i f o r n i a

216.781.9144 kainc.com

July 27, 2009

ka# 08039-02

T H E F E S T I VA L C O M PA N I E S

C A P R I U R B A N C R E N S H AW L L C

C A P R I U R B A N B A L D W I N L L C


PRIMARY TRADE AREA

The primary trade area for Baldwin Hills Crenshaw Plaza has been defined taking into account physical, psychological and geographic barriers to travel, access to current and planned regional transportation arteries, and the presence of major competitive retail facilities. It is also informed by familiarity with the trade area served by Westfield Culver City, BHCP’s closest superregional mall competitor. In this instance, the primary trade area has been defined as that geography from which approximately 72 percent of the center’s sales historically have been generated, according to the results of surveys conducted at the center in 2004, typical of regional and super-regional centers across the country. The trade area includes 11 zipcodes in the south and southwestern sector of Los Angeles. Its average radius is about three miles, but it does extend farther south to Interstate Highway 105, in a narrow corridor surrounding Western Avenue (zipcode 90047). The map below depicts the major zipcode components within the defined primary trade area, together with their income profile.

The following table reveals that the Project will serve a diverse trade area, from a socioeconomic perspective. No single zipcode accounts for more than one-sixth of trade area residents. Approximately one-eighth of the primary trade area’s higher-income ($100,000+) households are located in the zipcode surrounding BHCP (90008), but affluent households are distributed throughout the area. From a per capita income perspective, the most-affluent primary trade area zipcode is 90056 (Ladera Heights), southwest of the Project. According to Claritas, Inc., one of the nation’s largest vendors of demographic data, the sectors of the defined trade area expected to enjoy the most


rapid growth over the next five years are found in the 90007, 90019 and 90037 zipcodes.

As shown in the table following, the defined primary trade area is now home to an estimated 440,000 residents; households number almost 144,000; average household income is estimated at $53,000; and total household income is estimated to approach $8 billion. By 2015, trade area population is projected to approach 464,000, while households are projected to number more than 150,000, average household incomes should exceed $61,000 annually, and total household income is projected at more than $9 billion. (Projected values are in current, not constant, dollars.)

2009 2014 Change, 2009 HH Gain 2014 Change, Total '09 Per CapitaZip Community Population Population '09-'14 Households Since '00 Households '09-'14 Income ($MM) '09 Income >$75K-% >$75K-# >$100K-% >$100K-#

90007 Los Angeles 46,600 48,200 3.4% 13,100 4.0% 13,700 4.6% $475.3 $10,200 9% 1,235 5% 65990008 Los Angeles 31,100 32,000 2.9% 13,500 1.5% 13,800 2.2% $789.9 $25,400 25% 3,339 16% 2,16590016 Los Angeles 49,400 51,600 4.5% 16,800 3.1% 17,300 3.0% $844.7 $17,100 20% 3,325 11% 1,80490018 Los Angeles 50,600 52,800 4.3% 15,900 2.6% 16,500 3.8% $698.3 $13,800 15% 2,312 8% 1,23190019 Los Angeles 70,700 73,600 4.1% 24,800 4.2% 25,800 4.0% $1,463.5 $20,700 24% 6,024 14% 3,49990037 Los Angeles 60,100 62,700 4.3% 15,500 2.6% 16,100 3.9% $583.0 $9,700 11% 1,643 5% 84290043 Los Angeles 44,900 46,200 2.9% 15,600 0.0% 16,000 2.6% $983.3 $21,900 27% 4,285 18% 2,83590047 Los Angeles 48,300 50,000 3.5% 15,800 1.9% 16,300 3.2% $869.4 $18,000 25% 3,896 12% 1,94290056 Los Angeles 8,400 8,900 6.0% 3,500 0.0% 3,600 2.9% $458.6 $54,600 61% 2,148 47% 1,65090062 Los Angeles 30,400 31,600 3.9% 8,800 2.3% 9,100 3.4% $437.8 $14,400 17% 1,502 10% 84790089 Los Angeles 200 200 0.0% 100 0.0% 100 0.0% $1.5 $7,400 0% 0 0% 0

Totals 440,700 457,800 3.9% 143,400 2.5% 148,300 3.4% $7,605.3 $17,300 21% 29,709 12% 17,473

Compound Annual Change, '09-'14 0.8% 0.7%

2009 2014 Change, 2009 HH Gain 2014 Change, Total '09 Per CapitaZip Community Population Population '09-'14 Households Since '00 Households '09-'14 Income ($MM) HH Income >$75K-% >$75K-# >$100K-% >$100K-#

90007 Los Angeles 11% 11% 88% 9% 158% 9% 134% 6% 59% 46% 4% 41% 4%90008 Los Angeles 7% 7% 75% 9% 60% 9% 65% 10% 147% 119% 11% 132% 12%90016 Los Angeles 11% 11% 115% 12% 122% 12% 87% 11% 99% 96% 11% 88% 10%90018 Los Angeles 11% 12% 112% 11% 102% 11% 110% 9% 80% 70% 8% 64% 7%90019 Los Angeles 16% 16% 106% 17% 167% 17% 118% 19% 120% 117% 20% 116% 20%90037 Los Angeles 14% 14% 111% 11% 105% 11% 113% 8% 56% 51% 6% 45% 5%90043 Los Angeles 10% 10% 75% 11% 0% 11% 75% 13% 127% 133% 14% 149% 16%90047 Los Angeles 11% 11% 91% 11% 77% 11% 93% 11% 104% 119% 13% 101% 11%90056 Los Angeles 2% 2% 153% 2% 0% 2% 84% 6% 316% 296% 7% 387% 9%90062 Los Angeles 7% 7% 102% 6% 92% 6% 100% 6% 83% 82% 5% 79% 5%90089 Los Angeles 0% 0% 0% 0% 0% 0% 0% 0% 43% 0% 0% 0% 0%

Totals 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

Note: figures shown in the Relative Share of Primary Trade Area section of this table compare statistics for individual zipcodes to the primary trade area averages.

Sources: U.S. Census Bureau; Nielsen Claritas; Speer Consulting LLC.

2009 Households w/ Incomes:

Relative Share of Primary Trade Area

2009 Households w/ Incomes:

Comparative Zipcode DemographicsDefined Trade Area

BALDWIN HILLS CRENSHAW PLAZA


Annual Change:1990 - 2009 2009 - 2015

-------------- -- ----------- ------------- -- -----------1990 2000 2009 2012 2015 No. % No. %

Population - Off-Site 420,823 423,132 440,836 451,100 460,900 1,053 0.2 3,344 0.7Population - On-Site 0 0 0 0 2,900 N/A N/A 483 N/A

Households - Off-Site 143,760 143,367 143,566 146,400 149,200 (10) 0.0 939 0.6Households - On-Site 0 0 0 0 961 N/A N/A 160 N/A

Avg. H.H. Income 1/ N/A $44,483 $53,116 $57,200 $61,600 N/A N/A $1,414 2.5

Total H.H. Income ($000) N/A 6,377,329 7,625,581 8,374,080 9,249,918 N/A N/A 270,723 3.3

------------------------------------------ 1/ Census data for average household income in 2000 actually represent incomes for 1999. The 2000 income figures shown have been adjusted to take this into account.

Source: U.S. Census; Nielsen Claritas; Speer Consulting, LLC.

POPULATION, HOUSEHOLD & INCOME TRENDS AND PROJECTIONSBALDWIN HILLS CRENSHAW PLAZA PRIMARY TRADE AREA

The table following presents summarized demographic data for three-, five- and ten-mile radii around the Project, the defined primary trade area, and comparative data for the City of Los Angeles, the Los Angeles metropolitan statistical area (defined by the U.S. Census Bureau as Los Angeles County), California and the United States. As shown, trade area residents’ average household incomes are about 27% lower than comparable figures for the City of Los Angeles. (Trade area residents are two years younger, on average, than city-wide residents, and are more likely to be blue collar workers, likely accounting for much of the difference in incomes.) Trade area residents are more likely to rent their dwellings than their regional counterparts, suggesting increased potential for the leasing of apartment units at the Project. Extensive additional statistical data associated with Baldwin Hills Crenshaw Plaza’s primary trade area may be found in the Appendix to this report.


Demographic BHCP City of Los Angeles State ofCharacteristic 3 Miles 5 Miles 10 Miles PTA Los Angeles County (MSA) California USA

Population 373,000 1,225,000 3,443,600 440,800 3,945,800 10,154,900 37,559,700 306,624,700

Households 122,200 414,000 1,174,000 143,600 1,343,400 3,292,000 12,554,000 115,306,100

Proj. 5-Year HH Growth 3.3% 4.2% 4.3% 3.3% 4.6% 4.4% 6.3% 5.2%

Average HH Size 3.0 2.9 2.9 3.0 2.9 3.0 2.9 2.6

Median Age 33.2 33.1 33.9 32.7 34.7 34.9 34.9 36.8

Median HH Income $36,600 $38,300 $43,500 $35,600 $46,200 $54,200 $61,000 $51,400

Average HH Income $52,300 $57,500 $68,600 $52,300 $71,400 $77,500 $82,800 $69,400

Per Capita Income $17,300 $19,700 $23,700 $17,300 $24,600 $25,400 $28,100 $26,400

Total Income ($BB) $6.5 $24.1 $81.6 $7.6 $97.1 $257.9 $1,069.2 $8,094.9

# of Households w/ Incomes:>$50,000 44,400 158,400 513,600 51,800 623,200 1,743,800 7,350,500 58,956,000>$75,000 25,200 93,800 323,900 29,700 401,900 1,160,800 5,031,100 36,390,600>$100,000 14,800 57,900 213,000 17,500 267,300 771,000 3,357,000 22,254,100>$150,000 5,700 25,400 103,700 6,900 127,400 349,900 1,499,500 8,624,900

% of Households w/ Incomes:>$50,000 36% 38% 44% 36% 46% 53% 58% 51%>$75,000 21% 23% 28% 21% 30% 35% 40% 32%>$100,000 12% 14% 18% 12% 20% 23% 27% 19%>$150,000 5% 6% 9% 5% 9% 11% 12% 7%

White-Collar Employed 53% 56% 59% 54% 60% 62% 62% 60%

College Educated 14% 21% 24% 15% 25% 24% 26% 25%

Owner-Occupied Housing 37% 28% 32% 36% 38% 48% 58% 67%

Est. Median Housing Value $428,000 $474,200 $504,400 $430,600 $498,400 $470,300 $398,500 $172,400

Ethnicity:White 21% 32% 41% 22% 46% 47% 56% 73%Black 41% 23% 14% 40% 10% 9% 6% 12%Asian/Other 38% 45% 45% 39% 45% 44% 38% 15%

Hispanic 51% 52% 53% 49% 50% 48% 37% 16%

Sources: U.S. Census Bureau; Claritas, Inc.; Speer Consulting, LLC.

BALDWIN HILLS CRENSHAW PLAZA2009 COMPARATIVE DEMOGRAPHIC PROFILE

Baldwin Hills Radii


COMPETITIVE ALIGNMENT

At present, approximately 14 neighborhood and community centers, offering about 1.4 million square feet of leasable area, lie within the boundaries of the Project’s defined primary trade area. Few compete directly with the Project for portions of area residents’ expenditures, as BHCP is, and will be in the future, the only regional or superregional mall located within the defined primary trade area. No other centers within the primary trade area exceed 205,000 square feet in size, reinforcing the neighborhood and community orientation of these centers. Neighborhood and community centers’ offerings focus on providing daily necessities and convenience items, unlike the comparison goods orientation of regional and superregional malls like BHCP. The table following presents a summary of shopping center leasable area by orientation for all the zipcodes within the Project’s defined primary trade area.

Zip Community Neighborhood Community Regional SuperRegional TOTAL90007 Los Angeles 0 200,000 0 0 200,00090008 Los Angeles 142,440 140,000 0 841,904 1,124,34490016 Los Angeles 33,000 126,949 0 0 159,94990018 Los Angeles 9,765 0 0 0 9,76590019 Los Angeles 42,741 160,000 0 0 202,74190037 Los Angeles 10,272 0 0 0 10,27290043 Los Angeles 0 135,206 0 0 135,20690047 Los Angeles 0 203,170 0 0 203,17090056 Los Angeles 65,000 134,416 0 0 199,41690062 Los Angeles 0 0 0 0 090089 Los Angeles 0 0 0 0 0

Totals 303,218 1,099,741 0 841,904 2,244,863

Zip Community Neighborhood Community Regional SuperRegional TOTAL90007 Los Angeles 0% 18% N/A 0% 9%90008 Los Angeles 47% 13% N/A 100% 50%90016 Los Angeles 11% 12% N/A 0% 7%90018 Los Angeles 3% 0% N/A 0% 0%90019 Los Angeles 14% 15% N/A 0% 9%90037 Los Angeles 3% 0% N/A 0% 0%90043 Los Angeles 0% 12% N/A 0% 6%90047 Los Angeles 0% 18% N/A 0% 9%90056 Los Angeles 21% 12% N/A 0% 9%90062 Los Angeles 0% 0% N/A 0% 0%90089 Los Angeles 0% 0% N/A 0% 0%

Totals 100% 100% N/A 100% 100%

Sources: CoStar/National Research Bureau, "Shopping Center Directory"; Speer Consulting LLC.

Relative Share of Primary Trade Area

Comparative Zipcode Shopping Center Space (S.F.)Defined Trade Area

BALDWIN HILLS CRENSHAW PLAZA


There are also five department store-anchored regional or superregional malls and two larger specialty centers located outside of the primary trade area whose presence contribute to the establishment of the Project’s primary trade area boundaries since trade area overlap between regional and super-regional malls is uncommon. Additionally, two mixed-use developments with retail elements are proposed in Inglewood, four to five miles south of the Project, also beyond BHCP’s primary trade area boundaries. There are also a dozen other proposed developments (“Related Projects”) in the area which would include retail and/or food and beverage establishments. In total, if they are developed as planned, they would offer approximately 900,000 square feet of additional space, though the vast majority of these developments would be focused on neighborhood- and community-oriented uses. (A comprehensive listing of Related Projects is contained in the Appendix to this report.) Each of the larger existing or proposed competitive properties is described briefly in the summary tables on the following pages, and the locations of major competitors are depicted in the map below. Further detail on the major retail properties identified here is available in the Appendix to this report.

Year DistanceOpened/ from Anchor Index

Address Owner/ Expanded/ GLA Subject GLA (Spaces/Center Name Municipality Manager Renovated (000SF) (Miles) Name (SF) Spaces 000 SF) Comments

Baldwin Hills Crensaw & MLK Blvds. Capri Urban Baldwin LLC & 1947 842 - Macy's 158,306 2,695 3.2 Subject property.Crenshaw Plaza Los Angeles Capri Urban Crenshaw LLC/ 1992E Sears 150,920

The Festival Cos. 2002R WalMart 153,425Albertson's 44,052

Magic Johnson Cinema 75,000

Westfield Culver City I-405, Sepulveda Blvd. Westfield America 1975 873 4SW Best Buy 45,000 4,452 5.1 Strongest fashion-oriented regional mall competitor. Enclosed, two levels (formerly Westfield Fox Hills) & Slauson Ave. 1998R JCPenney 211,000 (partial 3rd level houses the food court and a few shops); +/-140 stores.

Culver City 2009E Macy's 192,500 Shop sales reported at $327/s.f. in 2008. A Fall 2009 redevelopmentTarget 155,000 converted the former Robinsons*May store to Best Buy on the lower level and

Target on the upper two levels, and the center was rebranded from Westfield Fox Hills to Westfield Culver City. The food court also was remodeled. The center has a fresh look with very limited vacancy.

Promenade at I-405, Sepulveda Blvd. & Passco Real Estate 2001 248 4SW Borders Books 25,004 2,300 9.3 The nearest retail entertainment center to BHCP. Two levels, open air; 35 shops.Howard Hughes Center Howard Hughes Pkwy. Enterprises Bridge Cinmea de Lux 106,474 The key draw for this property is the 17-screen all-stadium seating Cinema de

Los Angeles Nordstrom Rack 41,575 Lux, which offers patrons such amenities as an Imax theater, a restaurant, a cocktail lounge and concierge services. Five of the small shops are vacant, indicating leasing difficulties which reportedly have persisted from the time of the property's sale in 2005. Most shoppers pay $2 for up to 4 hours of parking, with an $8 daily maximum.

Macy's Plaza Flower & 7th Streets 700 So. Flower Plaza, LLC 1973 390 5NE Macy's 262,000 2,000 5.1 A two-level, enclosed mall with 44 shops in downtown Los Angeles.(@ MCI Center) Los Angeles Caters primarily to the Central Business District's daytime population

but also benefits from recent nearby apartment, condominium and loft developments.

7th & Fig 7th & Figueroa Streets Brookfield Properties 1986 332 5NE None N/A 2,500 7.5 A three-level, open-air center with 54 shops in downtown Los Angeles, once(@ Ernst & Young Plaza) Los Angeles anchored by two department stores (now closed). Like Macy's Plaza (see above).

this center benefits from the 450,000 nearby officeworkers in L.A.'s CBD, including 10,000 in two onsite towers. Reports sales of $300/s.f. Key dining establishments include Morton's Steakhouse and California Pizza Kitchen. More than two dozen of the center's shops are presently unoccupied in this struggling property.

Beverly Center Beverly & La Cienega Blvds. Taubman Centers 1982 880 5NW Bloomingdale's 163,000 3,000 3.4 Three levels, enclosed, +/-145 stores. Iconic West Side fashion-oriented mall.Los Angeles 2008R Macy's 225,000 One of two area Henri Bendel stores opened here in Fall 2009. Attractive

Beverly Cinemas 13 N/A common areas and compelling merchandise mix makes this center a key destination for affluent West Side residents. Very little vacancy.

The Grove Beverly Blvd. & Fairfax Ave. Caruso Affilated Holdings 2002 575 5N Nordstrom 122,000 3,505 6.1 Single-level, open-air, +/-50 stores. (Some stores have second levels.) OneLos Angeles American Girl Place 40,000 of L.A.'s only lifestyle centers, this very successful property reports annual

Barnes & Noble 40,000 shopper visitation of 20 million. Center sales reported exceed $600/s.f. and its Apple Store is rumored to generate more than $45 million in business. The Grove is home to Southern California's only American Girl Place store, Mattel's destination boutique for all things Barbie. Very few vacancies.

Westfield Century City Santa Monica Blvd. & Westfield America 1964 874 6NW Bloomingdale's 222,000 2,491 2.9 Two levels, open-air, +/-148 shops. 2008 tenant sales reported at an impressiveAvenue of the Stars 1987ER Gelson's Market 37,140 $855/s.f. The center's recent $127 million renovation included creation of an

Los Angeles 2005E Macy's 135,000 architecturally-compelling enclosed second-level dining terrace which features2006R AMC-15 N/A gourmet offerings and custom dinnerware. The AMC-15 opened in 2005,

replacing an older 14-screen theatre.

Sources: "Directory of Major Malls, 2009"; company websites; Speer Consulting, LLC.

Parking

COMPETITIVE ALIGNMENTBALDWIN HILLS CRENSHAW PLAZA ENVIRONS

BHCP-CompCtrs.xls, Existing Centers 3/12/2010, 12:48

Year DistanceOpened/ from Anchor Index

Address Owner/ Expanded/ GLA Subject GLA (Spaces/Center Name Municipality Manager Renovated (000SF) (Miles) Name (SF) Spaces 000 SF) Comments

Proposed:Hollywood Park Century Blvd. & Prarie Ave. Wilson Meany Sullivan 2015 620 4S 16-screen Cinema N/A N/A N/A The retail & entertainment element of the redevelopment of the Hollywood Park

Tomorrow Inglewood horseracing track. The EIR for the development was approved in Summer 2009. The 238-acre open-air mixed-use district would also include up to 3,000 residential units, a 300-room hotel, 25,000 s.f. of office space, 10,000 s.f. of community uses, a 25-acre park and a 120,000 s.f. casino. Its groundbreaking ceremony, previously announced for Fall 2009, has not yet taken place.

Proposed:Inglewood Promenade Century Blvd. & S. Prarie Ave. Imperial Partners, LLC Unknown 650 5S 16-screen Cinema 62,000 N/A N/A Another proposed open-air center, located just south of Hollywood Park across

Inglewood (3,700 seats) Century Blvd., it combines both lifestyle- and power/big box-oriented retail. The 60-acre project would include two 14-story office buildings with 900,000 s.f. of space and a 300-room hotel. The property also would include a secured remote terminal for airport parking, traveler and baggage check-in and transportation to the main terminals at Los Angeles International Airport. Timing for the project is uncertain.

Sources: "Directory of Major Malls, 2009"; company websites; Speer Consulting, LLC.

COMPETITIVE ALIGNMENTBALDWIN HILLS CRENSHAW PLAZA ENVIRONS

Parking

BHCP-CompCtrs.xls, Proposed Centers 3/12/2010, 12:48


PRIMARY TRADE AREA EXPENDITURE POTENTIALS

The proportion of total household income expended in retail stores has been calculated based on data from the U.S. Census of Retail Trade, the U.S. Census of Population, and Claritas, Inc. As indicated in the Appendix to this report, total retail expenditures in the Los Angeles metropolitan statistical area (Los Angeles County) are estimated at about 12.8 percent of household income for GAFO (General merchandise, Apparel, household Furnishings and Other shopping center-type merchandise), or comparison goods, stores. This figure is comparable to the 13.3 percent rate which is the U.S. norm and the state of California figure (12.8%), as well. In addition, approximately 11 percent of total household income is expended in food stores, restaurants and other eating and drinking establishments, also on par with state and national averages (11% and 10%, respectively). Area residents within the defined primary trade area currently spend an estimated $2.0 billion in shopping center-oriented stores, including food and other community-oriented stores and eating/drinking establishments. This total is projected to reach a level of about $2.4 billion by 2015, representing gains of slightly more than 3 percent per annum. Within total expenditures, general merchandise represents about $355 million in 2009. GAFO stores currently compete for approximately $974 million, while eating/drinking establishments account for another $348 million, and food and other community-oriented stores (e.g., beer, wine, liquor stores, pharmacies and drug stores) combine for $675 million. By 2015, GAFO expenditures are expected to increase by more than $207 million, to $1.2 billion, while eating/drinking establishment spending is expected to increase by $74 million to $422 million. Food and other community-oriented store spending is projected to grow to $818 million by 2015, a gain of almost $144 million. The following table presents estimated and projected residential expenditure potential by category for the BHCP Project’s defined primary trade area.

2009 2012 2015Estimated/Projected Households 143,566 146,400 150,161

Estimated Average Household Income $53,116 $57,200 $61,600

Est'd/Proj. Total HH Income (000's) $7,625,581 $8,374,080 $9,249,918

Retail Category 2009 2012 2015Department Stores-Conventional $113,267 $124,385 $137,394Department Stores-Discount $103,769 $113,954 $125,873Other General Merchandise Stores $138,012 $151,559 $167,410General Merchandise Total $355,048 $389,898 $430,677

Apparel $196,025 $215,266 $237,780Household Furnishings $218,041 $239,443 $264,487Other Shopping Center-type Stores $205,203 $225,345 $248,914Subtotal, GAFO $974,317 $1,069,952 $1,181,857

Eating/Drinking Establishments $347,912 $382,062 $422,021

Food Stores $493,694 $542,153 $598,856Other Community-Oriented Stores $181,029 $198,798 $219,590

Total Shopping Center-Type Retail Expenditures $1,996,951 $2,192,965 $2,422,325

Sources: U.S. Census Bureau, "2002 Censuses of Retail Trade and Accommodations/Food Services"; Claritas, Inc.; Speer Consulting, LLC.

BALDWIN HILLS CRENSHAW PLAZA PRIMARY TRADE AREA2009, 2012 & 2015

Resident Expenditures (000)

EXPENDITURE POTENTIAL BY CATEGORY:


PROJECT-RELATED ECONOMIC IMPACTS/POTENTIAL FOR URBAN DECAY

The previous section set forth estimated current and projected expenditure potentials within the Project’s defined primary trade area. To determine whether development of the Project would have adverse economic impacts on existing area retailers, the amount of retail space planned for the development is compared to anticipated changes in primary trade area spending and the amount of new comparable leasable area that spending would be expected to support. If the Project’s addition of such space exceeds expected growth in primary trade area demand for it, the Project could siphon sales from existing or planned new establishments within the defined primary trade area. If the Project’s supply of space were to exceed the demand for such space, additional assessment of whether its addition would result in “urban decay” (which is characterized by disinvestment, business closures or other types of physical deterioration in the area) would be required. In contrast, if there is sufficient anticipated primary trade area demand to support the type of new space contained in the Project and any other proposed new developments, it may be concluded that no significant economic impacts would be expected, and no further evaluation of potential urban decay associated with the Project is necessary.

At present, BHCP captures an estimated 13% of its defined primary trade area’s GAFO/comparison goods spending potential. Because the other existing retail properties within the primary trade area, as noted above, are neighborhood and community centers emphasizing goods that meet the daily needs of local residents, very likely substantially more than half of the area residents’ demand for GAFO goods is leaking from the trade area to centers beyond its borders. This conservative analysis, however, focuses only on the anticipated levels of new retail space which could be supported by anticipated increases in trade area spending potentials in the future. As shown in the table following, anticipated growth in demand within the Project’s defined primary trade area is expected to support approximately 1,435,000 square feet of new shopping center-oriented space by 2015, the third year of operations for the Project’s retail/commercial element. Current development plans call for Project-related space allocated to retail and food/beverage uses (i.e., excluding office, hotel and residential uses) to increase from 837,000 square feet at present to 1,480,000 square feet at buildout. As such, the Project would absorb slightly less than 45% of the space which could be supported by increasing retail demand within the defined primary trade area by its third year of operations. With regard to proposed hotel uses at the Project, at present there are only two lodging facilities (Best Western and America’s Best Value Inn motels), with a combined total of 99 rooms, within three miles of BHCP. As such, this area is substantially underserved by commercial lodging facilities, and the introduction of the Project’s 400-room hotel is unlikely to have any significant economic impact on existing properties. (There is only one other new lodging facility proposed for the primary market area, a small 37-room property.)


Assuming that the Project and all Related Projects with retail/food and beverage establishments within the primary trade area’s boundaries are developed over the 2010–2015 time period, newly-delivered retail/food and beverage space would total 1.56 million square feet of space. (In this conservative analysis, all of the identified Related Projects are assumed to open by 2015, an unlikely occurrence given current economic conditions.) Assuming that each development achieves a robust occupancy level of 90% (typical for retail development pro formas), new occupied space in the primary trade area would amount to 1,405,000 square feet. As such, the Project’s proposed incremental leasable retail space, combined with all new retail/food and beverage establishment space in Related Projects, fall within the amount of floor area which primary trade area demand could support. Consequently, it is not anticipated that the Project’s development would attract significant levels of business away from existing establishments or planned area retail developments. Accordingly, it is not expected that development of the Project would result in disinvestment, store closures or physical blight which could be associated with urban decay.

2009 2015Total Shopping Center-Type Retail Expenditures (000's): $1,996,951 $2,422,325

Change in Shopping Center-Type Retail Expenditures from 2009 (000's): N/A $425,374

Required Trade Area-Generated Sales to Support New Shopping Center Development ($/S.F.) 1/ $271 $296

Primary Trade Area Growth-Supported New Shopping Center Space (S.F.) N/A 1,435,082

1/ Based on International Council of Shopping Centers' reported Los Angeles Metro Area Regional Mall

shop space average of $470/ s.f. (2008) and anchor sales of $300/s.f.. Anchor space assumed to occupy

55% of total center leasable area, on average, for new development, consistent with the BHCP Project

development program. Required sales productivity increased at an assumed inflation rate of 1.5%/ year.

Sales generated from primary trade area residents estimated at 72% of total.

Sources: International Council of Shopping Centers Mall Index; Speer Consulting LLC.

SUPPORTABLE NEW RETAIL SPACEBALDWIN HILLS CRENSHAW PLAZA PRIMARY TRADE AREA

2015


DISCLAIMER

Speer Consulting LLC has used reasonable skill and care in preparing this report, and while the information contained herein is believed to be reliable, Speer Consulting LLC does not guarantee or warrant its accuracy or completeness. Speer Consulting LLC shall not be responsible nor liable for any loss of profit, business, revenues or any special indirect or consequential damage of any nature whatsoever, or loss of anticipated saving, or for any increased costs sustained by the client or his/her agents arising in any way, whether directly or indirectly, as a result of reliance on this report or of any error or defect herein. Speer Consulting LLC makes no warranty whatsoever, either express or implied, as to the accuracy of any data used in preparing this report including but not limited to any projections contained in this report which are necessarily of a subjective nature and subject to uncertainty. The findings, conclusions and recommendations set forth in this report constitute only Speer Consulting LLC’s opinion as to likely future trends or events based on information known to Speer Consulting LLC at the date of issuance of this report. This report is intended for use only by the client for whom it was prepared and shall not be quoted or made public in any way without Speer Consulting LLC’s written consent. Speer Consulting LLC shall not in any circumstance whatsoever be liable to any other person/entity for any claim, expense, loss or damage arising in any way as a result of reliance on this report.


MARKET RESEARCH, FINANCIAL ANALYSIS & NEW BUSINESS DEVELOPMENT

Mr. Speer, Principal of Speer Consulting, LLC, has more than a quarter-century of industry experience in the areas of retail market and consumer research, financial analysis and asset management. An independent advisor to retail and mixed-use developers, private and institutional investors, and public agencies since 2000, Mr. Speer is a respected counselor to senior management throughout the shopping center industry. As Vice President and Department Head of TrizecHahn’s Market Research and Financial Analysis Department (1987-2000), he was responsible for all market and financial analysis for new development projects and acquisition candidates. He evaluated feasibility of TrizecHahn’s entertainment, retail and mixed-use development opportunities in Latin America, Asia and Europe as well as throughout North America and was responsible for annual valuations of its $2.6 billion retail portfolio. A longstanding member of the International Council of Shopping Centers’ North American Research Advisory Task Force and a past member of its Steering Committee, Mr. Speer served as its Vice Chairman for two years and Chairman in 1993. He co-chaired ICSC’s 1998 Research Conference, was the chair of the 1999 Research Conference, and was a member of the Task Force’s 2006 and 2007 Research Conference Planning Subcommittees. He is a 2009 recipient of ICSC’s Trustees Distinguished Service Award. Mr. Speer holds bachelors degrees in both Political Science and Business from the University of California, Riverside and a Masters of Business Administration degree from the Stanford Graduate School of Business. He is a member of Phi Beta Kappa Honor Society and is a licensed California real estate broker.

Documents

Appendix J - LA City Planning3) Profiling the competitive alignment the retail element of the development will face; 4) Estimation of current and future expenditure potentials for